What is Performance Management?

An interesting question… Neither Wikipedia nor Dictionary.com has a definition for “Performance Management,” but Google it, and you get 124 million results! Many companies are in the same boat.

Seldom can they define what Performance Management means within their four walls, but there are at least 124 million opinions. Regardless of how your company defines Performance Management, it requires much more thought and integration than most people imagine. It is not the annual performance review process that everyone globally hates and it’s not how you endeavor to get your poor performers to work faster. It truly is a system with many integrated processes and activities that are focused on the following question: How do you ensure that your entire workforce delivers the corporate strategy (business results) effectively and efficiently?

The most important elements of performance management are represented below: What Matters:

• Systems and people are aligned to deliver the Corporate Strategy
• Every process delivers the behaviors and results expected

What Works: Set your strategy:

• Align/Engage the Organization
• Assign Ownership and provide Resources
• Monitor and Measure the actions and results
• Recognize and Reward the proper results and behaviors
• Celebrate success

Ownership: Differentiated by leadership and management

• Leadership must set the direction, provide the resources and coaching and work to align the organization
• The management of each Function defines and then owns what the direction/strategy means and the expected results
• Action owners deliver the results

Obviously this is an overly simplified path. Each of the following areas requires in-depth assessment, gap analysis, a determination of what is working, and a roadmap to deliver each step along the way.

• Strategy: If you don’t have an active Corporate Strategy, develop one and then start Executing against it.
• Measures: Create or clean-up your Balanced Scorecard and focus on the KPI’s that matter. Make sure people and leadership measures are included.
• Cascade: Ensure all required direction, measures, communications, etc. move throughout the organization. Cascade the information down to ensure everyone can determine how their works aligns with the top level strategy, goal and KPI.
• Leadership: Be seen as the LEADER of this work, don’t just delegate it. Walk the Talk. Be visible. Provide needed time and resources and recognition.
• Management: Performance needs to be actively managed with every day interaction between managers and their direct reports.
• Review: Set up a plan to review progress each and every month.
• Communicate: What is working. What needs to change? How this work has delivered results. Celebrate success! Recognize risks, successes and on-going support.
• Renew: Remember the only thing that is constant is Change – Heraclitus of Ephesos. Customers, environment, government, competitors – everything is changing and thus the measures and accountabilities of your Performance Management systems must be frequently renewed. Annually is not enogh!

My experience has shown that the three most important items to make Performance Management a success are: A clearly defined strategy, Leadership Commitment, Management and a Proven Model. Group50 has been leading highly successful companies through this entire process for many years. If you require assistance in understanding and delivering the overall process or even seeking clarity on a single step, give us a call. Group50 has several other performance management articles that may be of interest to you: Performance Management As A Business Strategy

About the author: Bruce Dougan is the head of Group50’s Organization Design and Development Practice. Bruce and the Group50 team are all former executives with well-known manufacturing and distribution companies who understand what it takes to design, train, develop and motivate organizations to successfully implement a company’s strategic plan. Group50 has designed a series of strategic assessments, workshops and strategic execution tools that optimize your organization. You can reach us at +1 (626) 644-9746 or send a note to info@group50.com.

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